There is a madness and frenzy in the real estate market that we are fueling. Why are we foolishly hiking up the prices to purchase a home? Did we not learn from our mistakes in the last bubble?
If we stop offering overinflated prices which are hundreds of thousands of dollars over the asking price, the real-estate market will stop playing us as fools. Except for all-cash buyers, the average young family has seen escalating prices and terms and exorbitant payments to get loans. A family must send both parents to work and let the kids fend for themselves just so the house payments can be met.
What is the psychology of those buyers who will pay any price as long as they get “the deal”? If they would just back off, the real-estate market would get back to a normal pace. How silly it is that a Goleta home that no one wanted at $250,000 is selling a few years later for over-asking at $700,000. No work has been done on the home for 40 years.
Where were all the buyers then and who are they now? It would be interesting to study the minds of those individuals or investors who are fueling this frenetic frenzy. How does one person need many homes and others will have none?